The FTSE 100 <.FTSE> was down 0.28 percent at 7,535.44 points as Britain's pound rose to an 11-day high. Sterling benefited from a dollar weakened by U.S. inflation data and new- found optimism on the outcome of Brexit negotiations.

The pound, whose plunge after the Brexit vote helped dollar earners on the index, has become the main gauge of how talks are progressing on Britain's separation from the European Union.

Mining companies, which are predominantly dollar-earning constituents of the FTSE 100, provided some support to the index. Rio Tinto (>> Rio Tinto) rose 3.3 percent,Glencore (>> Glencore) 2.7 percent and Anglo American 1.8 percent.

Sub-prime lender Provident Financial (>> Provident Financial) shone among mid-caps, soaring 12.4 percent to a six-week high after it said it had implemented a recovery plan for its troubled home credit business. The stock has plummeted around 70 percent this year.

Shares in emerging markets-focused manager Ashmore (>> Ashmore Group) jumped 7.1 percent after it reported its highest net inflows of client money for four years. Strong performances in emerging markets drew investors into the asset class.

Hedge fund Man Group (>> Man Group PLC) rose 3.4 percent to a two-year high. Assets in its long-only stock-picking unit gained 11 percent; $600 million flowed into emerging market debt strategies.

The top loser of the session was engineering group GKN (>> GKN), which sank 9.8 percent after it warned that weaker trading in aerospace would cause full-year profit to miss expectations.

"As anticipated, aerospace has seen a significant reduction in margin caused by pricing pressures, continuing operational challenges and the impact of programme transitions," analysts at Panmure Gordon said.

(Reporting by Helen Reid and Julien Ponthus; Editing by Larry King)

By Helen Reid and Julien Ponthus